Tag Archives: Fort Myers real estate

Happy New Year

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Each January everyone seems to ask what the new year will bring to the SW Florida real estate market.  While nobody has a crystal ball, experience and detailed analysis lends clues to what the future may hold.  Each year we release our annual State of the Market Report, which consists of the most detailed and current market stats around combined with our 20+ years of experience in the local real estate market. 

We pull these stats in January after agents have a chance to enter all their year-end transactions.  We pull from a variety of MLS databases then merge the data together and eliminate duplication of data.  Some listings are input and marketed to Realtors in multiple Boards, and we want the most current but accurate data free of duplication.  This all takes time, and then the real analysis can begin. 

Single Family Home Inventory in Fort Myers-Cape Coral Florida
Single Family Home Inventory in Fort Myers-Cape Coral Florida

Fortunately we do provide a significant amount of data all year round to our readers and viewers of the weekly Future of Real Estate Video Show, so we can offer some preliminary data combined with experience and make some educated guesses as to what 2010 might bring. 

As you can see from the attached graph, listing inventory has been rising recently, and pending sales have started to fall again.  We think this may be due to the anticipated expiration of the home buyer tax credit at the end of last November, but that has recently been extended and expanded into 2010.  Not only can first time home buyers take advantage of this credit up to $8,000, now people who currently own a home and plan to but a new primary residence can also take advantage up to $6,500.  Contracts must be in place by April 30, 2010 and must close by July 3, 2010. 

Add to this that our Northern friends are now here, and they are searching for homes.  Word has gotten around up North that Florida is on sale, and prices have begun to rise in some sectors, especially the bargain buys.  The Snow Birds realize 2010 may be the last “Season” to get these bargain basement prices, so they’re bringing their checkbooks looking to purchase.  We wouldn’t be surprised to see pending sales rise in the next few months and inventory to fall again as Northerners help scoop up even more of our inventory.  Investors have been hard at work in 2009 competing with first time home buyers, and we believe Northerners will be buying 2nd homes that they may one day move into, or vacation to at the least. 

The US Treasury Department has just issued new short sale guidelines which may make it easier to get short sales through for primary homeowners who are in trouble.  This may help add sellable homes to the market, which could help increase sales and relieve some of the strain on foreclosures. 

Speaking of foreclosures, we believe much of the entry level speculation inventory is now gone, and we expect higher priced inventory to enter the market, which will make 2nd homes and move-up homes more attractive.  As this occurs, look for more sales in the higher than median price range, which currently stands around $95,000.  These new bargains at the higher price levels will help raise the median sale price. 

Speaking of sales prices, we’ve seen 5 straight months of median price gains, and we look for that to continue.  In fact, early on in 2010 we may start to see year over year price gains, something we haven’t seen in about 4 years.  In other words, February or March of 2010 may see higher prices than February or March of 2009.  We can’t state the actual month it will occur, however if you study the graphs and data you can see that day looks like it’s coming fairly soon. 

Tune in to our weekly video show “The Future of Real Estate” at www.Topagent.com and stay tuned for our upcoming State of the Market Report which we’ll be releasing soon which will detail which areas of the county are moving, changes in averages sales prices, single family homes and condo data, and so much more.  We’ll even break it down by zip code and graph it out so you can see how your area is doing, and what the future may hold.  Stay tuned.

SW Florida Real Estate Inside the Numbers

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We’ve been researching and studying the SW Florida real estate market ahead of official releases due out next week, and our preliminary research tells us we expect sales numbers to increase approximately 100% or more over last August sales numbers.  The third quarter of 2009 is setting up to be another record quarter, and keep in mind 2008 numbers were near record numbers to begin with. 

Lee County single family inventory levels are on the decline again and pending sales are remaining strong.  The chart attached shows single family home inventory for Fort Myers and Cape Coral Florida. Listings in Fort Myers and Cape Coral fell by over 100 units as home buyers snapped up more property last month than came to the market. Separately, Lee County levels fell almost 200 units, suggesting buyers are buying faster than sellers and banks are bringing property to the market.

 

Fort Myers Cape Coral Listing Inventory Chart
Fort Myers Cape Coral Listing Inventory Chart

In the last several weeks we’ve addressed who is buying these properties, predominantly first time home buyers and long-term investors seeking to rent them out until the market improves.  At today’s low prices, properties actually cash flow, and we have lots of renters who have been displaced from properties. 

Now for some interesting observations we’re noticing that you won’t see in this chart.  We think home sales will be down about 11% from the previous month, which is normal due to seasonality.  Again, sales should be up about 100% over last year’s August, and last year’s August was down from July as well due to seasonality of the market, so no big surprises here. 

Foreclosure inventory increased 4.14% in the past month and foreclosure sales fell 13.82%  We’ve been saying for the past month or so banks are ramping up foreclosures for the next year and we expect double the write-downs banks will take, although because many of these properties will be in the higher price ranges it doesn’t mean we’ll see a doubling of foreclosure inventory.  Foreclosure inventory and sales will definitely be something we want to keep an eye on going forward and may tell the story of how our market is doing. 

Another trend we’re tracking is short sales to see if banks are cooperating more and agreeing to see short instead of taking back in foreclosure.  Even though total sales are down about 11%, and foreclosure sales are down about 13%, short sales are up about 3.76%.  This would suggest banks are cooperating more and our experience has been this is true; however it is still a very daunting process and not one a homeowner can reasonably attempt on their own.  In fact, it is so daunting that many agents won’t deal with short sales either.  If you’re going to attempt to buy or sell a short sale, make sure you’re dealing with an agent with lots of experience, preferably a CDPE (Certified Distressed Property Expert.)   

Distressed sales accounted for 70.04% of Lee County home sales in August, up slightly from 68.6% in July.  Distressed sales are here to stay for awhile.  In Fort Myers, 66.45% of the sales were distressed, while in Cape Coral the number is 68.87%  Lehigh Acres has far more distressed sales at 84.27%  County wide, distressed sales percentage remained stable over the previous month. 

Inventory levels fell in Fort Myers, remained fairly constant in Cape Coral, and increased about 2.35% in Lehigh Acres. So what’s the bottom line?  We believe median prices may increase some over time as banks bring higher priced foreclosures to the market.  Banks allowing more short sales may also increase the median sales price, but that doesn’t mean all homes are going up in value.  If this occurs like we think, it simply would mean the bottom has formed in the lower price range, and we’re still seeing erosion in prices in the mid to upper price ranges, and as they become more affordable buyers switch “on” and buy them.  

All real estate is local, and you can’t judge the entire market by a single statistic like median sales price.  This is why we take so much time to really study the market and explain what is really happening with hard facts.  We’ll keep an eye on the distressed end of the market, as these latest trends will offer us signs as to where the market actually is and where it’s headed. 

Until we flush out the distressed properties, normal market assumptions do not apply.  Supply and demand still rules, it’s just that it’s hard to get a grasp on supply without having a thorough understanding of what the banks are doing with foreclosures and short sales.  Until then we’ll keep tracking it for you and reporting the trends.

SW Florida Real Estate Update-Listing Inventory Levels Down

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SW Florida Listing Inventory Down

This week we’ll focus on the amount of single family home inventory in Lee County and
compare that with pending sales activity from a historical perspective so that we might be
able to draw some conclusions as to what’s happening today in the SW Florida real estate
market, and where the market may be headed.

Fort Myers and Cape Coral Real Estate Listing Inventory
Fort Myers and Cape Coral Real Estate Listing Inventory

As you can see from the chart which shows Fort Myers and Cape Coral single family
home inventory levels since December, 2004, inventory began rising in the 3rd Qtr of
2005, which was a precursor of what was to come.  The overall Lee County graph looks
similar, only larger numbers. Because new construction contracts were still in effect and
building was in its height at that time, the public really didn’t understand what was about
to happen.  Simultaneous to the rising inventory levels, you can see that pending sales
started to drop off as well.  Combine that with the flood of new construction homes that
continued to flood the market, and you can see very quickly what was about to happen. 
Having this information in real-time back in 2005 would have saved some investors some
money.

Fast forward to the 1st Qtr 2008.  As you can see, pending sales started to increase, and
listing inventory started to decrease. All the foreclosures entering market were quickly
absorbed, and then some.  2008 4th Qtr sales were close to an all-time record, and 1st Qtr
2009 was an all-time record.  In fact, we’re seeing more sales now than we saw at the
height of the Boom back in 2005.  So why isn’t everyone reporting this as the Boom?

2005 was filled with euphoria, rising prices, banks lending money like drunken sailors,
and just generally reckless abandon.  People just didn’t think it would end.  They ignored
the warning signs.  The market was not sustainable, but just try telling that at a cocktail
party with 6 of your closest friends who were flipping houses and making money. 
Nobody wanted it to end, and yet it could not continue.  It was phantom demand, and
over-supply. 

Today we have more sales than the Boom, but consumer confidence is low,
unemployment is high, oil is still high compared to 2005, and home sale prices are low. 
Homeowners are having a hard time making payments as incomes are down, and few
people feel great about their financial matters.  This is why nobody is calling 2009 a
Boom, and perhaps they should.  The opportunities for a buyer today are far greater than
they ever were in 2005.  2005 was a false market as nothing was what it appeared. 
Today’s market is real, and the bargains are there.  In fact, sale prices are so far below
replacement cost there is no building inventory entering the market in the foreseeable
future.

When the job market and the economy begin to recover, we may actually have difficulty
finding properties for buyers.  The builders have not been building, and many sellers
cannot afford to sell at today’s prices.  Banks have been forced to “short-sale” or
foreclose, and the foreclosures may start drying up by next year.  Some speculate there is
another wave coming due to resets in the ARM schedules in 2011; however we feel that
in SW Florida, most of those buyers have already walked because they were the
speculators who long ago realized they could never make a profit, so they chose not to
carry the costs.  If all this is true, we may have a period of diminishing inventory to sell
until the market sorts it out.

Many Realtors who study the market  were sounding the warning signs back in 2005, and
yet the public didn’t get the message.  Many of those same Realtors are recognizing that
2009 is a Boom, and yet not all of the public is getting that message either for reasons
outlined above.

Our goal is to provide you with meaningful data so that you can see what is really
happening in today’s market.  These first several weeks we’ll be providing a baseline of
where we’ve been and how that relates to where we’re headed.  We seek to provide
unbiased insight you might not have received anywhere else.  We seek to make sense of
what’s happening, and prove it with facts.  We can say that home sales have exploded
since 2008, and listing inventory is declining.  We’ll watch this market together, and
we’ll do our best to explain what’s happening.  We’re not tied to the outcome, as markets
go up and they go down.  Our job is to explain what it’s doing today, and offer our
insights as to where it may be going in the future, so you can make informed decisions. 
Remember, all real estate is local, even in SW Florida.  Just because we report something
is going on in the Cape or Fort Myers doesn’t necessarily mean the entire market is
affected the exact same way.

We are seeing a shift from Cape Coral, which has been on fire, over to Lehigh Acres, as
Lehigh is the affordable hot spot right now.  It’s the same shift we saw in the height when
prices in the Cape got carried away and buyers shifted to Lehigh.  Funny how life repeats
itself.  Stay tuned each week and we’ll present more insights.

SW Florida Social Media Update

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Last week we tested a social media experiment.  Our goal was to create a few Facebook Fan Pages for various parts of the SW Florida real estate market and see if we could drive 100 fans to each.  If we could do that, we could signup for Facebook unique URL’s.  We’re happy to report that not only did we hit our goal of 100 fans, we far surpassed it in only a week.  Currently we’re over 400 users on our Ellis Team site, and close to that on others.

The advantage of signing up on one of these pages is that we post timely news pertaining to each area, specific to that geographic location, or in the case of The Ellis Team site, about real estate marketing in general.  We provide discussion boards, Blog posts, nes paper articles, video updates, photos, and much more.

Our new goal is to hit 1,000 users by the end of the month.  Can we do it, who knows?  There’s no magic reason we picked this number, it just sounds fun.  We’ll post the web links here for Facebook users to follow us, and our Twitter addresses too for our Twitter users.

Facebook Pages

Ellis Team at RE/MAX Realty Group currently at 408 Fans

Cape Coral Real Estate                     currently at 244 Fans

SW Florida Real Estate                      currently at 342 Fans

Fort Myers Real Estate                      currently at 280 Fans

Future of Real Estate                        currently at 354 Fans

Twitter Followers can follow us at:

@swfltopagents   Ellis Team

@brettellis_swfl   Brett Ellis

We look forward to connecting with you on many levels.  We still do business the old fashioned way, and we still advertise in traditional methods like newspaper, TV, and radio.  We are however expanding our reach into the Social Media markets to better serve our customers, and we look forward to seeing you online.

Ellis Team SW Florida Real Estate Current Market Index for June 2009 Released

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The Ellis Team SW Florida Real Estate Current Market Index for June 2009 shows another slight improvement, down from 3.99 to 3.92  Remember, the lower the Index number, the better for sellers, and if you’ve followed this index for any length of time you’ll discover that it’s been very accurate forecasting the foreward movement of the Fort Myers real estate market and the Cape Coral real estate market.

Ellis Team SW Florida Real Estate Current Market Index June 2009
Ellis Team SW Florida Real Estate Current Market Index June 2009

 

Inventory fell from 12,579 last month to under 12,000 for the first time in a long time.  Inventory levels have been falling for awhile and pending sales have remained relatively stable, helping to draw down inventory levels.  Cape Coral inventory levels are very low, but so is Lehigh Acres copared to the pending sales.  Lehigh Acres has traditionally followed Cape Coral, and as the Cape’s prices have gone up in the entry level home market, Lehigh Acres demand has increased, just like in the run-up of the roaring 2000’s.

The Ellis Team are Top agents at RE/MAX Realty Group in Fort Myers Florida and study the SW Florida real estate market in great detail.

Attention Facebook Users – Social Media Experiment

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We’re conducting a social media experiment.  We’re seeking to add 100 users to our Fan Pages in the next several days.  If you are a Facebook user, simply go to the following pages and select Become a Fan.  Once we’re at 100 users we’ll announce the Facebook URL assigned to us.

Fort Myers Real Estate   Click to Become a Fan

SW Florida Real Estate  Click to Become a Fan

The Future of Real Estate  Click to Become a Fan

 

We’ll repport back and let everyone know how long it took to reach this goal, and the effects of viral marketing online via Social Networking.  Thanks for particpating Facebook users.

Lee County Single Family Home Sales Sold at Record Pace in 1st Qtr 2009

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Lee County single family home sales sold at a record pace for the 1st quarter of 2009, eclipsing the 1st Qtr of 2005.  This follows the 4th Qtr of 2008 which was the second highest quarter on record, taking a backseat to you guessed it, 2005.

Lee County Single Family Home Sales by Quarter
Lee County Single Family Home Sales by Quarter

For Larger Version, click here.

The bubble burst of years past has actually helped make homes affordable again, and combining that with a $8,000 first time home buyer tax credit in effect until Dec 1, 2009 and low interest rates, and median prices as low as 1997 prices, you’ve got a perfect storm again for dramatically increased home sales.  We believe 2nd Qtr home sales in Lee County will again be very strong, however home sales could slow later in 2009, but not for the reasons you might imagine.

Yes, interest rates have been climbing almost as fast as the price of oil, and both can negatively impact home sales.  The real reason home sales may decline in the 2nd half of 2009 may be that inventory is drying up.  In the coming weeks we’ll present some inventory graphs that will illustrate exactly what is happening with inventory. You would think that as inventory declines, prices would go up, and that is typical in a real estate cycle.  I think this cycle could be different.  For years, buyers have been conditioned that prices are going down and to wait for the bargains.  Buyers are just now getting the word that the bargains are disappearing and many are fighting with other home buyers to get the few bargains available.  Some buyers however, haven’t gotten the memo, and are still making offers at or below asking price, and they wonder why they’re missing out on house after house.  They’re not properly educated on what is actually happening in real time.

Jobs are not growing yet in SW Florida.  Right now we have investors coming in and scooping up the bargains and competing with home buyers because sales prices are so far below replacement cost builders can’t afford to build.  These prices are an anomaly and will not stay at these low prices forever.  This all leads me back to why I believe home sales could stagnate in the 2nd half if lenders don’t keep the foreclosure pipeline streaming.

There are two schools of thought on where prices are headed.  First is the old Supply Vs. Demand theory, that as inventory levels drop and buyers feverishly buy, prices automatically will go up.  In fact, we are seeing evidence of this occurring in certain segments, particularly waterfront and entry level Cape Coral homes.  Prices have bounced off the bottom and have been on their way up since last year.

The other school, and this theory is just my own and not economically tested, is that prices are so far below replacement cost, buyers have become conditioned to buy so long as it’s a bargain.  What happens when the bargains are gone and prices begin rising?  Will buyers buy in fear of prices tomorrow being higher than prices today?  Something tells me sellers will be staring down the buyers with a “gotcha” type mentality because sellers have taken it on the chin for so long.  Buyers may look at the sellers and say “You don’t have me, I’ll just sit back and do nothing now that it’s no longer a Deal.”  And hence the stare down begins, and the question becomes, who blinks and how long does it take?  We saw some evidence of this after Hurricane Andrew on the East coast.  Transactions slowed as buyers faced with diminished inventory couldn’t accept right away the new pricing the market brought to bear, and the stare down game began.

We do have some foreclosures backlogged in the system, and we’re going to need them to be released.  They all have to sell anyway, and the longer they sit vacant the more the properties deteriorate from lack of maintenance, storms, water damage, vandalism, etc. This leads to additional costs on repairing damages. Nothing good can happen with a vacant foreclosed home in a neighborhood, so the process of foreclosure and getting a new end user in actually helps the healing process of the market, and until we complete this process our market will not be healed.

Ultimately the wild cards are how many foreclosures will come to the market, and when will employment in SW Florida rise.  Pricing will most likely follow both events, and to some extent interest rates.  Interest rate increases cut into the buying power of buyers, and many first time home buyers are tight.  The other factor will probably be public perception of the overall economy and how people feel about their job and their overall financial situation.  The market’s ability to assess and discern what is truly happening in the real estate market, without all the fluff, will go a long way to determining when prices will start rising again and how quickly.

So the SW Florida real estate market is currently setting sales records.  In the coming weeks we’ll do our best to break down by segment exactly what is happening in our market and what it could mean going forward.

Fort Myers Cape Coral Real Estate Listing Inventory

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Below is a graph of inventory levels in just Fort Myers and Cape Coral since 2004.  The blue line is the active inventory listed in MLS and the orange line is the pending sales listed in MLS.  As you can see, back in 2005 there were as many buyers in the marketplace as there were sellers trying to sell.

Listing Inventory in Fort Myers and Cape Coral MLS
Listing Inventory in Fort Myers and Cape Coral MLS

 These figures do not include all of Lee County Florida, but rather just the Fort Myers and Cape Coral areas of Lee County.  At the end of the graph you’ll see a slight increase, but this is due to us switching MLS systems and including slightly more data.  We’ll watch this trendline from here on out but we can say inventory has been decreasing for months and foreclosures have not been keeping pace with the record sales we’re experiencing here in SW Florida.

Bank foreclosure agents we’ve spoken with all are noticing a decrease in bank foreclosure inventory.  The Ellis Team has sold much of it’s bank owned foreclosure inventory and have just about 6 left.  We expect more in the future, but as of right now first time home buyers, second home buyers, and investors have scooped up all but 6 we just received.  The 6 bank foreclosures have bank financing available at 4% interest with a 7 year balloon and 5% down for a primary buyer, and 6% interest and 20% down for an investor, or buyers can obtain their own financing.

SW Florida Real Estate Sales Sets Record in March 2009

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Single family home sales in Fort Myers and Cape Coral MSA were up 192% in March 2009 over March 2008.  The Fort Myers and Cape Coral MSA encompasses Lee County Florida. Home sales totalled 1,464 this year as compared to 501 last year.  Statewide sales were up 30% and median prices were down 30% from last year.  Fort Myers and Cape Coral is definitley leading the state in transaction increases.  Miami was next in line with a 101% increase in sales transactions.  For a complete chart of transactions by city and median prices, check out Florida Sales Report March 2009 Existing Single Family Homes. We’ve included a chart that shows home sales from 2005-2009 in SW Florida.

As you can see from our SW Florida Real Estate Sale Prices 2005-2009, sales prices are nothing like what they were in years past.  Prices declined 9.23% last month alone largely due to increased numbers of foreclosures selling in the lower price ranges, as you can see from our Month Over Month Sales Prices Chart.

Condo prices in Fort Myers and Cape Coral were down 36% from last year to a median price of $126,200, down from $196,400 last year.  Sales were up 53% this year as buyers reacted to the tremendous bargains in the market.  Many buyers have sensed the market has or is close to bottom and they better act soon.  See Condo Florida Sales Report.

Buyers have also responded to the $8,000 tax credit that essentially gives first time home buyers, or anyone who has not owned a home that was their primary residence in the last 3 years, a tax credit of 10% of sale price up to a limit of $8,000  Essentially the government is making the down payment for buyers, and buyers who put less than 10% down pocket the difference.  There are some income requirements.  See First-Time Home Buyer Tax Credit-What You Need to Know or watch our video explaining the First Time Home Buyer Tax Credit.

NBC  Nightly News recently did a report “Is Now the Time To Buy a Home” which can be fouond directly on our webpage.  there are some particularly good deal deals in Fort Myers real estate right now as pointed out in the NBC Report.

April 2009 Ellis Team SW Florida Real Estate Current Market Index

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SW Florida Real Estate Current Market Index April 2009
SW Florida Real Estate Current Market Index April 2009

 

The Ellis Team at RE/MAX Realty Group released the April 2009 SW Florida Real Estate Current market Index which accurately predicts the local real estate market’s future direction, and once again the index improved. Fort Myers and Cape Coral recorded their lowest numbers since October 2005.  In October 2005 the number stood at 3.44, and the index today stands at 3.72  The lowest on record was July 2005 when the index stood at 1.07.  The lower the number the better the market is for sellers and the higher the number the better the market is for buyers.  The lower numbers are a result of higher transaction volume combined with declining inventory levels.

 

Lee County Florida index numbers for single family homes stands at 4.26, down from 5.07 in March.  We’re seeing tremendous sales numbers for a variety of reasons. Not only do we have home affordability back in the market, but also the perception that we’ve seen drastic price cuts and the end in price declines may be near.  Buyers do not want to miss out on the possible buying opportunity of a lifetime.   Along with attractive pricing is record low interest rates, declining property taxes, and a decent but dwindling supply of homes to choose from.  Lastly, the government passed a 1st time home buyer tax credit that gives buyers up to $8,000 tax credit to buy a home and if the home is kept for three years does not have to be repaid to the government.

 

Rarely do all the stars align for a perfect buying opportunity, but that’s just exactly what we have right now.  The SW Florida real estate market has been heating up for some time, and in 2009 we’re seeing some dramatic results on the transaction volume side.  Pricing is a lagging indicator and will follow once inventory is depleted further.  We’ve already seen a 2.74% rise in prices in March over February 2009 numbers.  Total single family home inventory in Lee County fell to 12,356 in April, down from 13,019 in March.

 

Cape Coral is again leading the way as the CMI index numbers for the Cape stands at 2.88.  Fort Myers CMI numbers stand at 7.26 Inventory is dropping in both Fort Myers and Cape Coral, and pending sales are increasing.  We believe when official sales numbers are released later this month we’ll see record sales for March, and sales activity going forward for April and May looks to be very strong.  Current home prices are so far below replacement cost that builders are not even attempting to build yet.  Once this inventory is depleted prices may begin to rise on a gradual path towards replacement cost, and when that occurs builders will again start building.  We believe we are still some time off from that point; however we are amazed at how quickly homes are selling and how the SW Florida real estate market has heated up.  Once the overall economy improves and businesses start hiring again in force, we believe prices could rise at a quicker pace and approach replacement prices.  Until then, home sales will be great as long as the price is attractive, and we may enter No-Man’s land once we deplete existing inventory and the market absorbs what to do once the bargains are all gone.  The economy and employment will eventually drive home sale prices, and home sales may help drive the economy back to health.

 

Stay tuned as the market is definitely heating up, and the Current market Index points to more good times ahead.